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Open Door Capital Details
Assets Under Management$982M
Average IRR35.00%
Average Equity Multiple1.7x
3.96
Open Door Capital Website
Open Door Capital Overview
Open Door Capital is a privately held real estate investment firm founded by Brandon Turner that focuses on mobile home parks, self-storage facilities, and multifamily housing. Since its founding, Open Door Capital has acquired nearly $1 billion in real estate across more than 13,000 units and has partnered with over 2,000 investors.
Address
Kiehi,
Hawaii
96753
Year Founded
2017
Operates In
Virginia
Florida
Georgia
Mississippi
Texas
Asset Classes
Multifamily
Storage
Mobile Home Parks
Accepted Investors
Accredited
highlighted review
Verified Investor
1.00
"Horrible experience as an LP so far"
Invested in the Sunbelt Fund so have nothing good to report with essentially no distributions since investing a few years ago. Seems the operators including Brandon are more interested in marketing new projects instead of making sure existing struggling projects are operating well. Not sure where their preferred returns investors came from but will see if their able to turn the ship around on this fund and at least return our original investment. For all you new investors this is the type of email they presented AS THEY WERE MARKETING NEW FUNDS on social and their websites. In addition, we’ve seen a 20%+ surge in material and labor costs associated with both CapEx and regular unit turns. These multiple compounding factors have dramatically impacted the performance of SDP, causing a significant strain on cash flow and our ability to continue completing our targeted level of interior rehabs to maximize the ROI on our unit turns. Our Options My team and I have been working closely with Disrupt Equity over the past few months on a plan and have now identified what we believe is the best path forward. The good news is that our current loan term doesn’t end until June - September 2025 (depending on the property), so we won’t need to refinance until later next year. Having said that, we're left with a couple of options: Option #1 – sell the asset immediately at the most inopportune time. Accounting for the current headwinds mentioned above, we would estimate a disposition price of around $80M-$84M, translating to a 53-62% loss of original equity. Option #2 – Obtain ~$3M of additional equity to extend the property’s runway and allow for the full execution of our business plan going into a refinance. This would also provide us more time for the markets to adjust and alleviate some of the headwinds mentioned above. Note that this equity is the minimum required to cover our operational shortfalls and business plan to carry us to a refinance. Depending on market conditions at the time of refinance, there is a chance that additional preferred equity may be required for a cash-in refinance. This is wholly dependent on the market in 2025, which we’re hopeful will improve relative to the last couple of years.
Open Door Capital
Thank you for sharing your feedback. This year, Open Door Capital has launched just one traditional fund, and our equity raised and deployed is projected to be less than ~20% of what we’ve done in previous years as we’ve dedicated our focus toward operations amidst challenging macroeconomic headwinds brought on by the unprecedented run up in interest rates and massive tax/insurance increases. In addition, a significant portion of the capital that we ARE raising this year is going to triage a few structurally challenged deals in our portfolio, including the Sunbelt Diversified Portfolio that you mentioned. Only ~3-5 of our 20+ investment offerings to date are experiencing these type of structural issues due to the unprecedented impact (inflation, interest rates, etc.) from the COVID-19 pandemic. Also our team has grown significantly over the past few years to support the size of our portfolio. We now have a team of more than 100 employees spread across different functions within the company, and we are collectively invested heavily alongside you in every single deal. We’re always here to talk if you have any further questions or need clarification on anything affecting performance. Just reach out to our Investor Relations team and we will set up a call with the appropriate team member to get your questions answered.
Verified Investor
1.00
"Poor results and recent 100% loss of invested capital"
I have participated in multiple Open Door Capital (ODC) offerings, and the results have been mainly poor. Most notably, I recently suffered a 100% loss of capital on the Heights on Katy investment. The issues are consistent across the board: Poor Results: Performance has consistently lagged behind initial projections. Absent Leadership: There is a lack of 'boots on the ground' operations. In my opinion, Brandon Turner has not been 'in the trenches' enough to maintain a pulse on performance or address mounting issues effectively. Delayed Communication: Updates are provided a month or more later when comparing to other operators I am invested with. High-Risk Financing: I believe ODC over-leveraged short-term variable-rate loans. In 2021-22 many inexperienced operators were doing deals because it was easy to raise the capital. It appears ODC prioritized closing deals and collecting fees over hedging against interest rate risk and market cycles. I will not be investing with ODC again.
Verified Investor
2.00
"Open Door Capital Hollister Place Apartments"
I invested with ODC due to following Brandon Turner and wanting to support him with ODC. This was one of my first LP investments so I just trusted pro forma without the sponsor having the backing of a solid track record on bigger assets and in Houston, TX. On this particular deal they partnered with Disrupt Equity as the property manager. Disrupt Equity appeared to be a solid local operator, however that turn out not to be the case, property lost occupancy and did not perform close to the projections. I would definitely say don't invest with Disrupt Equity as they dropped the ball in property management and I would say ODC has to go through growing pains of a newer sponsor trying to find their footing with their team, hires, etc. Currently this project has paused distributions over the past year and the total distribution is less than 1% annualized since investing late in 2022. Looking back I now tend to favor vertically integrated sponsors feeling like it limits this risk an you don't have to do due diligence on 2 sponsors.
Open Door Capital
Thank you for sharing your perspective. We understand the frustration when a property doesn’t perform as expected. Hollister Place was acquired in late 2022, just before the multifamily market experienced some huge shifts. Since acquisition, interest rates have risen beyond what anyone expected, operating costs have increased, and Houston has seen a substantial amount of new supply come online. Those factors have impacted many assets purchased during that period across the market. That said, we understand the frustration you feel with a non-vertically integrated operational structure. Our manufactured housing communities are vertically integrated, and one of the biggest advantages of that model is the level of operational visibility and responsiveness it allows. While Hollister Place has faced challenges, the property itself remains structurally sound. The asset is financed with long-term fixed-rate debt and maintains healthy reserves, which provide time and flexibility to continue stabilizing operations and navigating the current market environment. Please feel free to reach out at any time if you have any specific questions about your investment with us. Our team is always available.
Michael H.
1.00
"Lost 100% of Capital"
We lost 100% of capital in the deal we participated. The deal struggled immediately out of the gate. Communicated last year expectation to lose 70% of capital but worked different avenues trying to save the deal. Once those avenues were exhausted, ended up having to sell at complete loss for the equity in our class of shares. Do not recommend.
Open Door Capital
Hi Michael. It’s true that we worked all angles possible to try to save this deal. While Class A equity holders received their principal and preferred return, we ultimately came up short for our Class B investors. We understand how disappointing that is and recognize the trust placed in us when you invested. If you would like to discuss the specifics of your investment, our team is always available.
Verified Investor
1.00
"Disappointed "
Unfortunately I was advised I would have a 100% loss of capital invested into Heights on Katy. Management is friendly, but this is not acceptable.
Open Door Capital
Thank you for the kind words about our management team. As for Heights on Katy, we made every effort possible to change the outcome of this deal. We explored restructurings, recapitalization options, and multiple other strategies to preserve equity. And while Class A equity holders received their principal and preferred return, the final outcome did result in capital loss for our Class B investors. We are genuinely sorry that this is how the investment ultimately turned out. We don’t take the trust that you put in us lightly. While we can’t speak to your specific account due to the anonymous review, we are always available if you have any questions.